The real estate landscape in Ontario underwent a significant transformation with the implementation of the Trust In Real Estate Services Act (TRESA) in December. This legislation aims to enhance professionalism, consumer protection, and education for both buyers and sellers. TRESA, replacing the Real Estate & Business Brokers Act of 2002, introduces several key changes that affect how consumers interact with their real estate agents and aims to address the shortcomings in real estate governance.
Three provisions in TRESA have garnered the most attention: open bidding, the introduction of “designated representation,” and new rules on sales commissions. Open bidding is intended to tackle the issue of bidding wars that emerged during the pandemic, where buyers were compelled to make excessively high offers. While TRESA allows buyers to request written offer details, the decision to disclose competitive offers lies with the sellers.
The concept of “designated representation” under TRESA is another significant change. This provision allows consumers to designate an agent at a real estate brokerage to represent their interests. However, caution is advised, as this change means that the buyer’s representative can now potentially negotiate in favor of the buyer, even if the buyer and seller are clients of the same brokerage.
TRESA also addresses the controversy surrounding sales commissions in the real estate industry. Ongoing lawsuits in the United States have challenged the practice of promising split commissions. TRESA aims to bring more transparency to this area and prevent situations where buyers are unaware of commissions being offered.
While TRESA marks an important step towards improving real estate governance, there are concerns regarding the effectiveness of certain provisions. The impact of open bidding, designated representation, and new commission rules will become clearer as the real estate industry adapts to these changes.
FAQ:
Q: What is TRESA?
A: TRESA stands for Trust In Real Estate Services Act, which replaced the Real Estate & Business Brokers Act of 2002 in Ontario.
Q: What are the key provisions of TRESA?
A: The key provisions of TRESA include open bidding, designated representation, and new rules on sales commissions.
Q: How does TRESA address the issue of bidding wars?
A: TRESA allows buyers to request written offer details, but it is up to the sellers to decide whether to disclose competitive offers.
Q: What is designated representation?
A: Designated representation allows consumers to designate an agent at a real estate brokerage to represent their interests.
Q: How does TRESA address sales commissions?
A: TRESA aims to bring more transparency to sales commissions by preventing undisclosed commission arrangements and ensuring buyers are aware of any commissions being offered.
Q: Are there any concerns about the effectiveness of TRESA?
A: While TRESA is a step in the right direction, there are concerns about the impact and effectiveness of certain provisions, which will become clearer over time.
Comentários